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Choosing and researching a section

Before purchasing a section to build a new home on, you should research the section and consider how its location could affect building costs. See our inspection and further research checklists at the bottom of this page.

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Location and building costs

The location of your section can have a bearing on building costs. For example, your new section may have an amazing view, perched on a cliff overlooking the sea. But it will also be exposed to the wind, the risk of erosion or flooding, and the risk of corrosion to materials.

Wind

Houses exposed to high winds have to be designed appropriately, for example the building may need extra bracing and may attract a higher score on the weathertightness risk matrix.

Erosion and flooding

There is provision in the Building Act 2004 for the council to refuse to grant a building consent if the land is at risk of a natural hazard, such as erosion, flooding, subsidence, or slippage, or if the building work itself is likely to accelerate the problem. If the council decides that there is a risk from a natural hazard but the building work won’t worsen the problem, it may grant a building consent but must advise the Registrar-General of Land, who will note on the certificate of title that a building consent has been issued under section 72.

So take special care to check the certificate of title for any section 72 endorsements on the title which will alert you to the fact that the land is at risk of erosion, flooding or subsidence. Note, it may appear as a section 36 endorsement under the prior 1991 Building Act.

Insurance may also be a problem if the section has an erosion risk. The Earthquake Commission (EQC) insures against earthquake, natural landslip, volcanic eruption, hydrothermal activity, tsunami, and, in the case of residential land, a storm or flood; or fire caused by any of these. You are automatically covered by EQC insurance when you take out private insurance cover for your home or belongings and the EQC premium is built into the premium you pay your own insurance company.

However, subsidence is not covered by the EQC. So if you are buying a section with a risk of erosion or subsidence you may need to get extra private insurance cover for risks not covered by the EQC.

Corrosion

If the house is near the sea it will need to have corrosion-resistant features in the roofing, joinery and structural connectors. It may also need more frequent washing and painting after you’ve moved in.

Some of these problems can be offset by using adapted designs that suit the environment without being significantly more expensive. A good designer should be able to advise you on this. Their advice could influence your decision to buy the section or not.

If you are still keen, research the section in more detail.

Tip: Before you sign up to buy a section, it is very important to ask your architect or designer to check out the site for you - they can advise you if your ideas are workable given the shape and size of the section.

Certificate of title

The certificate of title (CT) will tell you the size and general shape of the section, who owns it and whether there are mortgages, leases, rights of way or other interests registered against the title.

It will also tell you whether the land is freehold or leasehold.

Getting a certificate of title

You can get a copy of the CT yourself or ask your lawyer, project manager or another search agent to get it for you.

There are many search agents available. Look in the Yellow Pages under Real Estate Agents, Property Management, Land Information, Resource Management, Document Services, Legal Agents, Lawyers, and Surveyors.

If you are doing the search yourself, you will need:

  • the correct Land District - you can get this from the Land Information NZ (LINZ) website.
  • You also need the CT number. Get this from the real estate agent, property developer, or go to a LINZ processing centre. (You will need the legal description of the property, e.g. Lot 1 DP 1234, which you can get off the rating records for that address).

Once you have the CT number, you can order a copy of the CT by:

  • visiting a LINZ processing centre
  • through the LINZ website,
  • or you can post or fax in a request. A small fee is payable. You should get a copy of the CT within 36 hours.

Note that some councils require you to have a copy of the CT before you can apply for a LIM. This is to make sure you are researching the correct section. For example, if you give the street address for a vacant section that happens to be a cross lease, you may get a LIM for all the units that have already been built on the other parts of the cross lease.

Covenants and easements

Covenants and easements are restrictions and obligations on the use of the section. They are usually put on the title by the developer when the land is subdivided. But anyone - for example, a person selling off a back section subdivided from their own property – can impose covenants and easements to give themselves some control over the way the new section is used.

Examples of covenants are:

  • Controls over the way houses are built, i.e. size, type of materials, even the plans and the time within which construction is to be completed. Also the type and size of fencing allowed.
  • Restrictions against people operating a business from home.
  • Restrictions on the types and numbers of pets.
  • Height restrictions to protect views.
  • Protection of trees or bush.

An example of an easement might be a right of way giving access to the back section, or a right to pipe water across one section to the other. It is important to know that you can’t usually build over whatever the easement is protecting. This could limit your use of the section.

Covenants and easements are recorded on the CT and continue even after you’ve built your house. Depending on what the covenant and easements impose, you need to know that:

  • You can comply fully with the covenant or easement.
  • The covenant applies equally to the other sections in the subdivision, and not just to you. For example, if height restrictions apply you’d want your neighbour to be subject to them too so that you don’t get overshadowed.
  • The resale value of your property won’t be affected – covenants and easements stay on the title even when you sell.

Have your lawyer check the details for you as part of the title search.

Inspection checklist

What to look for in your initial inspection of a section:

  • How close are amenities, such as schools, shops, hospitals and public transport?
  • Site aspect. Is it sunny? Is it windy? Does it have a view? What about privacy? You might need to visit at different times of the day, and in different weather conditions. Does there seem to be good drainage? Are there swampy areas? Is the section prone to flooding? Consider also the different times of year – how much sun will it get in winter when the sun is low? Decide what is important to you.
  • Is access difficult? Consider it as a building site. This could have a big impact on building costs (as well as convenience when you move in).
  • Is there room for garaging or off-road parking?
  • Find out what services (water, sewage, power, phone, gas) are connected to the site. Your local council can tell you what services are available from the road, but you’ll have to check the subdivision plan for services on to the section. You may have to pay to bring services on site. Find out if you will be on public sewerage or a septic tank. Check with the neighbours whether there is good television and mobile phone reception.Park
  • What do the neighbours seem like? Are their properties well-kept? Are there overhanging trees that could cause a nuisance? Could there be a noise problem from them or their pets?
  • The location will affect the price you pay but if a section seems too cheap there’s probably a good reason. Ask a valuer or real estate agent for a comparison with other sales in the area and, if it still seems cheap, do some further investigation.
  • Drive around the neighbourhood at different times of the night and day, and in the weekend. Watch for traffic and noise from community activities like sports. Get a feel for the area. If you are looking in a rural area consider smells, and noise from animals or harvesting that goes on around the clock.
  • Is there any vacant land nearby? Find out whether the council has any plans for it. Research the zoning classification and what can and can’t be built under the district plan.
  • Are there any public utility easements or special covenants on the land?

Before you buy

If you are still interested after your initial inspections, there is further information you should research before buying:

  • Get a copy of the certificate of title.
  • Check the certificate of title for convenants, easements and consent notices placed at the time of subdivision that might limit your use of the site.
  • Check the district plan – this will tell you things like height or boundary restrictions, and will let you know what your neighbours are permitted to do.
  • Also check the district plan to find out if you need any resource consents before you start building.
  • Get a Land Information Memorandum from the council.
  • Decide if an engineer's report is necessary before you buy (your designer can advise you on this).
  • Find out what wind zone the site is located in. The council will provide this information or direct you to someone who can.
  • Check the survey information.
  • Get a valuation to decide if the price is right and if needed for mortgage purposes.
  • Make sure you have a satisfactory sale and purchase agreement.
Case study promo default

Case study

We heard about a building site where the designer only saw photographs of the site. He drew plans that put the house at a lower level than a creek running through the section which put the house at risk if the creek flooded.

The problem did not become evident until after building had started and the foundations needed to be lifted higher, requiring a new engineer’s report, new building consent and, of course, extra cost.

Glossary

A number of people share in the ownership of a piece of land as tenants in common and cross lease the homes built on the land from the other land-owners.

An examination of the chain of title to real property as indicated in the public records in order to determine the ownership of the property, and any encumbrances or defects on the title.

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